Blackstone’s hedge fund business to launch growth strategy

The main hedge fund fund in Blackstone had lost some of the rich returns from growth investments in recent years, as its conservative, low-volatility approach aims to hedge clients’ portfolios. Blackstone hired Joe Dowling, former head of Brown University, in January to run his hedge fund business with John McCormick.

Mr. Bommer, 54 years old, is Mr. Dowling’s first recruit. The private equity firm has generally pushed for more investment in high-growth companies and recently took a stake in dating app owner Bumble and Swedish oat milk producer Oatly AB.

“There are great opportunities with the disruption going on as technology is now permeating all these different industries,” said Mr. Bommer, who previously led New York-based SAB Capital Management for 17 years before closing it in 2015 to manage his own money.

Mr. Bommer is in charge of building a team for Horizon. Blackstone said eight executives have already been selected for the platform, two of whom are women, many in a male-dominated industry.

Mr. Bommer said Blackstone’s deep partnerships with hedge fund managers will help it access top investors and their best co-investment ideas in private companies ready to go public, a model Mr. Dowling used at Brown. . Mr. Bommer said those deals would benefit from “almost a double layer of control” by managers and Blackstone.

He also showed interest in PIPE deals – private investments in public stocks – in companies that go public through blank checks. Horizon could also bring in shares of companies that recently went public when early investor blocks expire, or be a cornerstone investor in direct-listed companies. Direct listings are an increasingly popular way for companies to go public, bypassing the traditional IPO process.

“I can’t think of anyone better at evaluating, underwriting, and then estimating both risk and reward,” said Mr. Dowling of Mr. Bommer, a friend since their days at business school together in the 1990s.

‘He’s had thousands and thousands of reps [repetitions] across industries and asset classes and that’s what you need to be really good, ”said Mr Dowling.

During his time at SAB, Mr. Bommer invested largely in relatively cheap listed companies as a value investor and also invested in special situations. He saw SAB grow to a height of $ 2 billion.

Although it underperformed its rivals by the end of the year, SAB outperformed the S&P 500’s total returns by more than 7% year-over-year over its lifetime, with less risk, according to an investor document reviewed by The Wall Street Journal.

Mr. Bommer has been focused on investing late stage growth with his personal assets since closing SAB, while also continuing to invest in public markets. He was a seed investor in the Latin American delivery startup Rappi Inc. when it was valued at about $ 20 million. The most recent round in September valued the company at $ 4.3 billion post-money.

Mr. Bommer, who presents himself with a low profile as a hedge fund manager, has drawn attention to his real estate transactions. He and his wife, Donya, spent $ 93.9 million on three adjacent East Hampton packages that they sold for $ 110 million in 2016. In 2008, De Bommers set what were then records for the purchase and sales figures of cooperative apartments in New York City.

Write to Juliet Chung at [email protected]